What is Driving Discretionary Spending in 2025?

Key Takeaways: 

1. Value Wins in 2025: Discount & Dollar Stores and Off-Price Apparel are outperforming as consumers prioritize value and the “treasure-hunt” experience.
2. Small Splurges Over Big Projects: Clothing and Home Furnishing traffic remains strong as shoppers favor accessible wardrobe updates and decor refreshes instead of major renovations.
3. Big-Ticket Weakness: Electronics and Home Improvement visits continue to lag, reflecting a continued deferment of larger purchases.
4. Bifurcation in Apparel: Visits to off-price and luxury segments are growing, while general apparel, athleisure, and department stores face ongoing pressures from consumer trade-downs.
5. Income Dynamics Shape Apparel: Higher-income shoppers sustain luxury and athleisure, while off-price is driving traffic from more lower-income consumers.
6. Beauty Normalizes but Stays Relevant: After a pandemic-driven surge, YoY declines likely indicate that beauty visits are stabilizing; shorter trips are giving way to longer visits as retailers deploy new tech and immersive experiences.